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Crude Continues Rally On Supply News


Crude has started the APAC session higher after rising again on Wednesday, as US crude stocks fell again. News of production cuts in August have supported oil through the week. WTI is approaching $72/bbl and is currently around $71.93. Brent closed at $76.56. The 0.3% increase in the USD index driven by higher yields didn’t hold back oil prices.

  • Saudi Arabia’s announcement to extend its 1mbd output cut into August and Russia’s 500kbd export reduction plus 20kbd reduction from Algeria have provided support and prices are now up over 1.5% this week amid thin trading volumes. Brent reached an intraday high yesterday of $76.95 and WTI of $72.17, both the highest since 22 June.
  • WTI approached resistance at $72.72, after this lies $75.70. Brent closed in on $77.25 after which lies $78.47, the bull trigger.
  • Bloomberg is reporting that US API crude inventories fell another 4.38mn barrels in the latest week after -2.41mn according to sources familiar with the data. Gasoline rose 1.6mn and distillate 600k.
  • UAE announced that it currently won’t be making voluntary output reductions. Saudi’s energy minister said that Russia’s export cuts will be “meaningful”. Other supply news included disruption to crude output in Kazakhstan because of power outages and a German refiner limiting diesel supplies due to market tightness.

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